CEOSPEAK: Make our ci­ties smart

Hari Sankaran*

FICCI Business Digest - - Contents - *Hari Sankaran is Vice Chair­man and Man­ag­ing Di­rec­tor of In­fras­truc­ture Leas­ing & Financial Ser­vices Lim­ited, Mum­bai.

T he Hon'ble Prime Min­is­ter has set out a vi­sion of a 100 Smart Ci­ties. In his inim­itable style, he has set us a 4in-1 : a chal­lenge, an op­por­tu­nity, a di­rec­tion, and, a met­ric of suc­cess. In­dia is in the throes of rapid ur­ban­i­sa­tion, hav­ing reg­is­tered growth rates in ex­cess of 31% in each of the last two decades. Ex­perts have spent con­sid­er­able time and resources fore­cast­ing the pace of the de­mo­graphic trans­for­ma­tion in our ur­ban land­scape. With­out get­ting into the specifics, suf­fice it to say that the chal­lenge is gar­gan­tuan. Some 200 mil­lion In­di­ans are likely to mi­grate into ur­ban ar­eas over the next two decades! This level of mi­gra­tion, over a short span, will be cat­a­clysmic if we do not re­spond in mis­sion mode. In­deed, the ur­ban div­i­dend that we hope to reap as a coun­try from the mo­men­tum of this mi­gra­tion will turn into an ur­ban night­mare : wide­spread so­cial, eco­nomic and po­lit­i­cal un­rest, low pro­duc­tiv­ity, and, un­sus­tain­able ser­vices on the back of large num­bers of the unemployed and un­der­served.

Un­man­aged ur­ban growth will stran­gle our econ­omy, sti­fle growth, and, make In­dia an un­de­sir­able des­ti­na­tion for global in­vest­ment. The Smart ci­ties chal­lenge is thus to de­fine the ini­tia­tive in a man­ner that ad­dresses th­ese is­sues. If we do so, the Smart Ci­ties chal­lenge will pro­vide both pub­lic and pri­vate sec­tor, do­mes­tic and global com­pa­nies, huge op­por­tu­ni­ties for in­vest­ment and growth. Through the ful­fill­ment of the Smart ci­ties op­por­tu­ni­ties, the qual­ity, avail­abil­ity, and, cost ef­fec­tive­ness of ser­vices to or­di­nary cit­i­zens would im­prove and the di­rec­tion would be set for con­tin­u­ous im­prove­ment in the fu­ture. Thus the met­ric of suc­cess in the Smart Ci­ties pro­gram is ev­i­dent : a smart city ini­tia­tive is one that cre­ates an en­vi­ron­ment that en­cour­ages growth in ur­ban em­ploy­ment, pro­duc­tiv­ity, and, qual­ity if life. Credit to Prime Min­is­ter Modi for suc­cinctly gal­va­niz­ing our col­lec­tive fo­cus on a trans­for­ma­tion that could re­al­ize In­dia's po­ten­tial and meet the world's ex­pec­ta­tions

Ci­ties have been uni­ver­sally rec­og­nized as the main en­gines of growth for the fu­ture. Their con­tri­bu­tion to the coun­try's GDP is es­ti­mated to rise from 60% to­day to nearly 75% in the next 15 years. A McKin­sey study es­ti­mates that ci­ties will gen­er­ate 70% of all new em­ploy­ment. The JNNURM was the first na­tion­wide re­form ef­fort that tried to

ad­dress th­ese chal­lenges and en­hance the qual­ity of ba­sic mu­nic­i­pal ser­vices and gov­er­nance in 65 ci­ties. The 100 Smart Ci­ties pro­gramme is the next gen­er­a­tion of re­forms that could take for­ward the un­fin­ished agenda of the pre­vi­ous ur­ban mis­sion. This would be sup­ple­mented by the AM­RUT scheme across 500 ci­ties

In­dian ci­ties, in con­trast to most oth­ers in the world, are no­to­ri­ously poor in their qual­ity of ser­vices, en­vi­ron­ment, pro­duc­tiv­ity, plan­ning, and in their abil­ity to sup­port rapid ur­ban­iza­tion. Im­prov­ing it to be­come the en­gines of growth will re­quire mas­sive in­vest­ments. Whilst the Prime Min­is­ter has done his bit of set­ting the vi­sion and po­si­tion­ing the ini­tia­tive glob­ally, it is now our turn to con­vert this vi­sion into re­al­ity. The move to trans­form our ci­ties has cer­tainly ig­nited the imag­i­na­tion of stake­hold­ers both in In­dia and abroad : in­fras­truc­ture play­ers, tech­nol­ogy so­lu­tion providers, fi­nanc­ing in­sti­tu­tions, etc, are all gear­ing up to par­tic­i­pate in the smart ci­ties ini­tia­tive. How­ever, to get th­ese play­ers into the sec­tor and to mo­bi­lize the resources will re­quire sig­nif­i­cant ef­fort at the pol­icy, reg­u­la­tory, fi­nanc­ing frame­work lev­els, amongst oth­ers.

Land poli­cies to pro­mote

Ur­ban Re­newal : Re­de­vel­op­ment would be an es­sen­tial fea­ture of Smart Ci­ties. Master Plans are pro­mot­ing den­si­fi­ca­tion and in­ten­sive use of scarce ur­ban land through Tran­sit Ori­ented De­vel­op­ment (TOD) poli­cies, which would also help to re­place old and un­safe hous­ing stock. Com­mu­ni­ties are be­ing en­cour­aged to take the ini­tia­tive to avail of higher FSI and re­build as per mod­ern plan­ning prin­ci­ples, but one of the ma­jor chal­lenges is in evolv­ing con­sen­sus amongst the mem­bers them­selves. We need to evolve poli­cies and tem­plates for such ideas to be­come im­ple­mentable on the ground : ar­chi­tec­turally sig­nif­i­cant build­ings need to be pre­served, the needs of the home­less needs to be ad­dressed along with those with homes, land costs need to come down, in­fras­truc­ture and util­i­ties need to be mod­ern­ized, the ur­ban en­vi­ron­ment has be sig­nif­i­cantly im­proved, and, pub­lic spa­ces needs to be cre­ated and pro­tected. Th­ese is­sues have been de­bated at length : we need to im­ple­ment and en­force th­ese rules ur­gently

Tech­nol­ogy and In­no­va­tion : Th­ese are com­monly con­sid­ered to be es­sen­tial com­po­nents of a Smart City. Sig­nif­i­cant progress is claimed to have been made in the de­vel­oped coun­tries in ad­vanc­ing con­cepts in ur­ban mo­bil­ity, wa­ter and san­i­ta­tion, en­ergy and en­vi­ron­ment man­age­ment, sus­tain­able habi­tats, ur­ban gov­er­nance, etc. In­dian ci­ties have the op­por­tu­nity to leapfrog, pro­vided they care­fully se­lect proven, cus­tom­ized so­lu­tions suit­able for our en­vi­ron­ment on a life cy­cle cost ba­sis as against the L1 ap­proach cur­rently in vogue

Fi­nanc­ing : Smart City ini­tia­tives would com­prise a bas­ket of projects that are amenable to PPP, and oth­ers that need to be nec­es­sar­ily funded by the Gov­ern­ment. SEBI's ap­proval of the frame­work for is­suance and list­ing of mu­nic­i­pal­i­ties bonds, and higher de­vo­lu­tion of funds from the Cen­tre to the States are en­cour­ag­ing de­vel­op­ments. But City Author­i­ties need to com­ple­ment this by en­hanc­ing their own rev­enue bases through land mon­e­ti­za­tion strate­gies, and levy­ing user charges on cost re­cov­ery prin­ci­ples. This would also help them to ac­cess cap­i­tal mar­kets, pen­sion funds, sov­er­eign funds and as­sis­tance from bi­lat­eral and mul­ti­lat­eral agen­cies

Pro­cure­ment: Our pub­lic

pro­cure­ment sys­tem largely works on low­est front-end cost method, which re­flects a short term view of in­fras­truc­ture. To al­low in­duc­tion of lat­est tech­nol­ogy and in­no­va­tion, we must switch to a more sci­en­tific sys­tem of pro­cure­ment based on meet­ing key per­for­mance in­di­ca­tors over the project life, and cor­re­spond­ing life cy­cle costs. Fur­ther, to re­duce the in­ef­fi­cien­cies of mul­ti­ple agen­cies work­ing in piece­meal man­ner, city author­i­ties could try bundling dif­fer­ent ser­vices un­der in­te­grated bid pack­ages as far as pos­si­ble Na­tional Ur­ban Knowl­edge

Repos­i­tory : Last, but not the least, we need to cre­ate a knowl­edge-ex­change plat­form for shar­ing ex­pe­ri­ences, best prac­tices, and, tech­nol­ogy eval­u­a­tion amongst dif­fer­ent stake­hold­ers. Housed in the Min­istry of Ur­ban De­vel­op­ment, Gov­ern­ment of In­dia, it should be made ac­ces­si­ble to all stake­hold­ers. Most ULBs, par­tic­u­larly the smaller ones, could im­mensely ben­e­fit from such a plat­form The Smart City ini­tia­tive pro­vides a unique op­por­tu­nity to cre­ate a trans­for­ma­tional im­pact in the con­text of ur­ban de­vel­op­ment of In­dia. With global at­ten­tion fo­cused on In­dia, we would be able to ac­cess a wide range of know-how and ex­per­tise, com­ple­mented by long term fund­ing to suc­cess­fully retrofit and re­build our ci­ties. And across the di­ver­sity of 100 ci­ties, we would find our own so­lu­tions and repli­ca­ble tem­plates, which can then be ap­plied to the next 500 towns. The stakes are high : get­ting the Smart Ci­ties ini­tia­tive right will drive In­dia's GDP to dou­ble dig­its and cre­ate the mil­lions of new jobs that this coun­try des­per­ately needs.

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